• Acute Care
• Long Term Care

Labor Costs Are Driving Rising Healthcare Costs

According to PricewaterhouseCoopers, compensation is the most significant driver of hospital costs. It's easy to see why:

• Currently, more than 15 percent of the $1.7 trillion in healthcare spending goes to paying the salaries and benefits of hospital workers.¹
• The American Hospital Association found that labor costs as a percentage of total hospital spending are approximately 60 percent.²
• The "Curing a Sick System" study found that nearly 55 percent of healthcare executives believe the outlook for controlling U.S. healthcare costs is favorable, compared to only 20 percent of consumers.
• The "Curing a Sick System" study also found that more than 30 percent of healthcare executives allocate more than 20 percent of their budget to agency costs to fill nursing and other essential positions on a temporary basis.

Click image to enlarge

Notes:
¹ PricewaterhouseCoopers, "Cost of Caring: Key Drivers of Growth in Spending on Hospital Care," February 19, 2003, p. 3. "Health Care Costs 101," p. 5. www.chcf.org/documents/insurance/HCCosts10105.pdf.
Caroline Sternberg, "Special Report: Cost Drivers," American Hospital Association. www.hospitalconnect.com/hospitalconnect/index.jsp.
Pricewaterhouse Coopers, "Cost of Caring: Key Drivers of Growth in Spending on Hospital Care," February 19, 2003, p 8.
² Caroline Sternberg, "Special Report: Cost Drivers," American Hospital Association. www.hospitalconnect.com/hospitalconnect/index.jsp.

Links

• The U.S. Healthcare System Today: Paying More and Getting Less
• Higher healthcare costs
• Lower quality patient care
• Labor costs are driving down healthcare costs (this page)
• Saving the system saves consumers money